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Joe Eqcome

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  • Morningstar CEF Ratings: Worse Than Random [View article]

    First of all, impugning people’s integrity is a serious charge. Let’s review the facts.

    Morningstar has a CEF ratings system. The article was a review of its results over a limited period of time. I’ve acknowledged in numerous places in the article that predicting stock returns is a difficult business and the people at Morningstar are hardworking, well intentioned, high-integrity folks. I sure if you did the same analysis on other rating systems you’d probably get close to random results.

    I’ve also disclosed that I’m in the early development of a rating CEF ratings system. I would place no value on it until it demonstrated its effectiveness--which would probably take a year from this writing. I’ve also indicated that my system might be equally as ineffective once the appropriate data is accumulated. I have not asserted that my ratings are more accurate—they're just there.

    I have no economic interest in my rating system as its available free for those who might have a passing interest. I'm hopeful, that I might be able to incorporate suggestions from others to improve its accuracy.

    Lastly, the article places an emphasis on taking charge of your investments by doing some of your own homework. It’s always desirable to get more than one data point when making investments which I take as a serious business. That data points doesn’t have to be mine.

    This doesn’t sound nefarious to me.

    Joe Eqcome

    On Jun 09 10:05 AM YoYoMama wrote:

    > That you are developing your own rating system for ETFs sincerely
    > casts doubts on the integrity of your motives in posting this article.
    > RE:
    > Disclosure: Joe maintains a CEF rating system on his website that
    > has been operational for a limited time. As a consequence, there’s
    > currently insufficient data for a similar analysis. Once such data
    > has been accumulated, an analysis will be undertaken and presented.
    > It may in fact prove just as disappointing.
    Jun 9 12:19 PM | 4 Likes Like |Link to Comment
  • CEFs: Discount at Historical Average [View article]

    With the possible exception of certain muni bond funds, I’m underweighted on the fixed income side—particularly long government/agency bonds. I’m concerned we’re going to see more inflation at some future point in time as global governments print money to float us out of the toxic assets problem. This would put downward pressure on the asset values.

    If you have a slightly positive bias towards the market, you may want to consider “buy-write” CEFs. These CEFs buy a diversified portfolio of stocks and write call option against its portfolio. Such CEFs can generate premium income by writing (sell) the option and if a particular stock gets called away because the share price rises to the option strike price, the CEF can book another gain. You don’t want to owns such funds if you think the market is going to decline as the share price decline can off-set the premium received by writing calls.

    Options are a very specialized investment area which I’m not as familiar as I’d like to become, so caution is in order.

    If you’re so inclined, you might want to consider Eaton Vance Tax-Managed Buy-Write Income Fund (ETB). It has over $300 million in assets, currently yielding 13.9% and is selling a discount of 5.8%.

    Breaking down the 13.9% distribution yield: 2.2% is supported by investment income; if you add on net realized gains it boosts it to approximately 5.8%; the rest coming from return of capital. So, the distribution yield is priced accordingly.

    I hope this is helpful.

    Joe Eqcome

    On Jun 08 10:00 AM oldman wrote:

    > with weakness in employment, housing, retail etc is there any good
    > reason funds that hold goveernment/agency bonds sold off? My thought
    > is perhaps a strong stock market has temporarily changed the flow
    > of funds and weakness in bonds will become stronger a gain. Where
    > would you get your income from now?
    Jun 8 12:22 PM | Likes Like |Link to Comment
  • CEFs: Discount at Historical Average [View article]

    I maintain my own database of approximately 640 CEFs and download pricing data daily. So, the CEF discount is calculated on that basis.

    I post the month end Prem/Disc on my website for the Eqcome Index along with its CEF sub-indices (see "CEFIndex", on the website. That Prem/Disc is different than the one I noted in the article as it included a comparison of data I had available for all CEFs in the data base; the Eqcome CEF Index is comprised of just 130 CEFs.

    These number would be different that Claymore CEF index as it is constructed differently.

    You're aware that Claymore updates its index daily? Its available on under indices/fund/clmref/hi...

    I hope this is helpful

    Joe Eqcome

    On Jun 07 01:55 PM bsharvy wrote:

    > Where are you getting the info that the average discount is 5.7%
    > on the index. Claymore's site last updated the info on March 31.
    Jun 8 11:26 AM | Likes Like |Link to Comment
  • A Poor Man's CEF Portfolio That Performs [View article]
    Phil, Phil, Phil……..,

    You seemed to have missed the point.

    The point of the article was to construct a CEF portfolio as the S&P stock selection committee would have selected a stock to add to its indices and see how it performed. That selection process included certain criteria when looking for Index candidates: trading analysis, liquidity, ownership, fundamental analysis, market capitalization, and sector representation.

    This portfolio was not meant to be a portfolio of best CEFs picks base upon a portfolio managers criteria, but one constructed on a limited set of rules to test a basis thesis: If you constructed a CEF portfolio like S&P does, what would you get? It just happened to perform favorably relative to a CEF rule based index.

    Anyone can change the stock in the fund types that best suits them. I have no economic interest in the portfolio.

    Since you’ve taken the time to provide a detailed response, let me response in a detail manner addressing your points.

    Point 1: “An investor with $10,000 to invest doesn't need the complexity of something like this.”

    Response: I wouldn’t disagree with this observation but you failed to provide any recommendations or data to support your contention. Is this a case of "proof by assertion".

    Point 2: “One of the major attractions of CEFs is the ability to buy them at a significant discount.”

    Response: The stock for inclusion in the portfolio were based on the limited criteria stated above and not representative of the best stock picks in the sector based upon a criteria, as you’ve mentioned, premium or discount. (Some CEF portfolios are not liquid and are priced infrequently and can cause discounts or premiums not reflect the true underlying value of the assets. This is “mark to market” issue that banks are currently faced with; I’d assume this would apply for high yield bond funds where the last trade may not represent the current value.)

    Point 3: “Your chart includes the distribution yield….Your chart does NOT include each fund's expense ratio, which is VERY important.

    Response: As it relates to the observation regarding distribution yield, I agree that it does represent the dividends from investment income, that is why I labeled it distribution yield and not dividends. Nonetheless, I agree with this observation and given more space I would have made that point.

    Again, an expense ratio would have been helpful given the space. On average the expense ratio is 1.8% versus 1.5% for the industry. The reason for this slighty higher expense ratio is that there are far less higher skilled funds (convert, high yield, etc. represented as fund types) that would charge more than more than the garden variety equity funds.

    Also, your focus on expense ratios might be misplaced if it isn’t compared against a peer group and/or the return generated by the CEF. Sometimes when you pay peanuts you get monkeys.

    4: Your cost comparison of the commissions of buying these funds implies…

    Response: I don’t see what’s so confusing about this point. Let me make it simple for you. There are CEFs that invest in CEFs (FOF is an example). The managements are paid a fee for that purpose; let’s say 1.5%. Let’s say you construct this portfolio yourself of the group of stocks owned by the CEF, wouldn’t you eliminate paying that 1.5% management fee annually? What difficult about this concept.

    Point 5: You should mention that many CEFs, including some on your list, are leveraged….

    Response: Yes, some of these are leveraged, but so are some of the companies that are in the S&P 500. (Do they mention that?) Again, that wasn’t a criterion for the construction of the portfolio.

    Point 6: It is relatively easy to create an index or portfolio of investments that beat a benchmark like the S&P 500 over the last 5 years. Hindsight is 20/20…

    Response: The portfolio was modeled on the selection process of the S&P 500 committee to see if it could be applied to CEFs. The portfolio wasn’t constructed to be a superior performer; it just ended up that way.

    Joe Eqcome

    On Jun 04 02:50 PM Phil S wrote:

    > Hoo boy...
    > Where to start?
    > 1) An investor with $10,000 to invest doesn't need the complexity
    > of something like this. The (likely potential) incremental returns
    > improvements from this on a $10K portfolio are small, relative to
    > incremental costs and complexity it adds versus a plan based on 2-4
    > low cost index funds.
    > 2) One of the major attractions of CEFs is the ability to buy them
    > at a significant discount. Of your 10 funds, only 3 are at a 10%+
    > discount. You've even got a fund trading at a 55.72% premium in there!
    > In my opinion, it is not smart to pay $830 (100 shares worth) for
    > roughly $513 worth of underlying net assets.
    > 3) Your chart includes the distribution yield, which, while somewhat
    > useful, may very well confuse novice investors unfamiliar with CEFs
    > (which often distribute more than they 'earn'). Your chart does NOT
    > include each fund's expense ratio, which is VERY important.
    > 4) Your cost comparison of the commissions of buying these funds
    > implies that by paying some commissions up front, the investor is
    > saving money in the long run, by avoiding "1.5% average CEF management
    > fees". Your description is sloppy and may mislead novice investors.
    > Perhaps you are referring to the AUM (Assets Under Management) fees
    > that some financial advisors charge, ON TOP of fees in underlying
    > investments. In any case, CEFs, like ETFs and mutual funds, have
    > expense ratios that are built in. Investors don't see a line item
    > charge on their brokerage statement for these, but they pay them
    > all the same (they are, if I understand correctly, deducted from
    > the assets of the funds, and effectively lower the NAV and/or distributions
    > of the funds). Note that the expense ratios for CEFs are generally
    > HIGHER than those for low cost, broad-based index funds or ETFs from
    > Vanguard and similar companies.
    > So a small investor has to pay:
    > 1) Commissions
    > 2) Spreads (an implicit cost - roughly half the difference between
    > the bid and ask price for a CEF).
    > 3) Expense ratios
    > The first two are generally paid once when you buy and once when
    > you sell. The last is an ongoing cost.
    > Yes, they avoid a fee to an advisor, if they don't use one. But an
    > investor who is managing their own portfolio (and thus somewhat likely
    > to read this article and perhaps follow the advice), is probably
    > not using an investment advisor charging a wrap fee anyways, and
    > may be confused by your language.
    > 5) In an article seemingly aimed at less knowledgeable investors,
    > you should mention that many CEFs, including some on your list, are
    > leveraged. i.e. They borrow money in various ways to invest more
    > in their target strategy. In good times, that can boost returns,
    > but in bad times (such as we've recently experienced) that can magnify
    > losses. Many leveraged CEFs are significantly riskier than similar
    > non-CEF options.
    > 6) Is this the first publication of your "Eqcome CEF Big 10 Portfolio"?
    > If so, you should probably add a cautionary note for the promising-looking
    > comparison chart. It is relatively easy to create an index or portfolio
    > of investments that beat a benchmark like the S&P 500 over the
    > last 5 years. Hindsight is 20/20. I shoulda/coulda bought Google
    > back in the day. Indexes are far more reliable gauges of the value
    > of a particular strategy or asset class going FORWARD from the time
    > they are first constructed and published. This doesn't mean that
    > it's wrong to show the backtest results for a newly constructed portfolio/index,
    > but rather, you should disclose the date at which it first went 'live',
    > and, particularly for an article aimed at novices, highlight the
    > issues with such backtests.
    > ===
    > OK, so that was a lot of criticism of a relatively short article.
    > Still, I think investors who are interested in owning CEFs should
    > have a reasonable understanding of the costs and risks.
    > All this criticism does not mean that CEFs are necessarily a bad
    > investment. In fact, much of my portfolio is currently in various
    > CEFs. But would-be CEF investors should educate themselves. Understand
    > the costs, the risks, the nature of CEF distributions (and the differences
    > relative to more conventional dividend payments from other asset
    > classes). Understand the nature of CEF premiums and discounts. Realistically,
    > it will take many hours of reading (in my opinion), from a variety
    > of different sources, to really understand CEFs. For a $10K portfolio,
    > it strikes me as unlikely that the incremental benefits of informed
    > CEF investing (relative to other good alternatives) will be large
    > enough to justify the time and commission investment.
    > In particular, be able to solidly answer the question "Why CEFs?".
    > If you don't know why, or if, they are superior for you than other
    > investments, then you probably shouldn't be investing in them.<br/>
    > Disclosure - I currently own many CEFs, but not (at the moment),
    > any of the currently listed "Big 10".
    Jun 5 02:20 PM | 3 Likes Like |Link to Comment
  • CEFs Up for the Week; Insider Buying at Boulder Growth Surges [View article]

    By definition closed end funds (CEFs) must distribute their net investment income and capital gains on an annual basis or its equivalent. The only way it can obviate this regulatory requirement is to pay taxes on the income and gains or offset gains with carry forward losses. While from time-to-time, the former, may make sense on a special situation basis, it would be in direct conflict of the purpose of a CEF which is a conduit by definition and would be subject to shareholder protest.

    BIF does Berkshire Hathaway; it also owns other stocks that do pay dividends. In fact, 25% of its total portfolio it REITs that are conduits and pay dividends. Also, any realized gain in the appreciation of Berkshire’s stock held by BIF would be subject to distribution requirements.

    I would submit that if BIF reinstated its dividend that was suspended last year, the stock would respond positively. One would presume that the insiders that currently own 20% of the fund recognize that fact. I thing it is reasonable to assume that dividend will be reinstated; just went would be subject to loss carry forwards and the not so transparent agenda of the insiders who own the management company that advising BIF.

    Joe Eqcome

    On Jun 02 09:23 PM anarchist wrote:

    > My question above was covered in your May 17 article. If 30% of BIF
    > is invested in Berkshire Hathaway then where does the dividend come
    > from since neither BRK.A or BRK.B pays a dividend?
    > Thanks
    Jun 3 12:36 PM | 1 Like Like |Link to Comment
  • CEFs Up for the Week; Insider Buying at Boulder Growth Surges [View article]

    Thank you for your comment.

    I try to be somewhat disciplined with my CEF market segment reviews. I have a very limited mission that I try to restrict it to two pages. That mission is to: 1) provide a top-down overview of what’s going on in the CEF market sectors; 2) try to discern if there are any major trend developing for the time period selected; 3) compare it to other related performance metrics; 4) end with an investable idea.

    So, my intent wasn’t to explore in-depth the relationship of the insider buyers at BIF, but to provide the underlying reasoning for the investment idea portion of the article. (That is not to say that there isn’t significant intrigue with regards to the interrelationships of the CEFs you noted above and the related managements and insiders. In fact, you have done a yeoman’s job of chronicling it.)

    I find that it actually takes more time than one imagines for a investment idea like BIF to gain traction. I, like you, think this stock has “legs” and I’m willing to wait. There’s an old adage in real estate business, “buy at the perimeter and sell when they meet you.” I’m buying BIF and I will be selling it when everyone else figures I what we know; or, if I uncover a flaw in my logic.

    A detail analysis of BIF’s insider issues is subject for a different article.

    Joe Eqcome

    On Jun 01 11:46 AM Dan Plettner wrote:

    > Joe, was it your intent to adequately discuss the relevance of insider
    > buying of BIF? Given the mention in your article's title and your
    > historically thorough writing style, I was very surprised that you
    > didn't really discuss the unique details pertinent to BIF market
    > participants.
    > How do you perceive the insider buying surge to relate to the 2nd
    > Shareholder Vote Adjournment, Control Issues, and the 'Manipulation
    > or Hallucination' story that you previously authored?
    > Personally, with analysis of those topics, I could reasonably see
    > BIF trading at a 15-20% premium some time next year, with the related
    > funds (BTF, FF, DNY) then trading at a 30%-40% discount.
    > Disclosure: Long BIF (added to pre-existing long position today)
    Jun 1 09:36 PM | 1 Like Like |Link to Comment
  • Weekly CEF Review: Highs and Lows [View article]
    Alan Young

    I’ll try to include the average weekly prem/disc change per CEF fund type in next week’s CEF review.

    CHN may be a more interesting China play than CAF given the former is trading at a discount, has a higher distribution, lower expense ratio and has not appreciated as much as CAF YTD. (Food for thought)

    You’re correct on ascribing the term “trader” as opposed to investor regarding playing the volatility in commercial real estate securities (URE: long; SRS: short). I have a tendency to play URE both long and short as a result of it’s recent share price being under $4.00. However, more conservative traders should consider SRS as a short position.

    Joe Eqcome.

    On May 24 11:00 AM Alan Young wrote:

    > Thanks for this fine overview. Would it be possible for you to post
    > the average premium/discount within each sector? That change from
    > week to week is of considerable interest.
    > With regard to CAF, a week or so ago it was sporting a PREMIUM of
    > over 30%! It's finally coming back to earth.
    > With regard to real estate, I believe you mean that TRADERS (not
    > investors) should consider URE and its inverse, SRS. Unless you are
    > asserting that REITs are going to rally again?
    > Thanks
    May 26 08:56 AM | Likes Like |Link to Comment
  • Weekly CEF Review: Highs and Lows [View article]

    On its face, it appears the actions initiated by BIF’s management (“insiders”) in late ‘08 may be intended to benefit insiders at the expense of majority shareholders.

    Those actions include a staggered board, a suspended dividend and a cessation of new investments post a successful rights offering. All this curiously was enacted prior to the significant, systematic purchase by insiders of BIF’s stock at significantly lower prices.

    We’ll all be curious to see what actions BIF’s management will take post completion of their share acquisition program with regards to reinstatement of the dividend and deployment of funds for investment. They may just shoot themselves with a smoking gun.

    With respect to a staggered board, I believe this would not be in the best interest of the majority of shareholders (vote “No”). As someone once said, in the investment business, there’s either a conflict of interest or there’s no interest. The key is to manage the conflict.

    I believe there are currently no checks and balances with regards to the potential conflict of interest of the insiders’ ownership (control person) and management of BIF being the same. The ability to summarily replace the entire board by a super-majority action (2/3’s) should provide some protection to shareholders as well as management.

    Joe Eqcome (I have a small ownership position in BIF)

    On May 24 01:10 PM Dan Plettner wrote:

    > Joe, do you think that the Current Board of Directors has been acting
    > in the best interest of the average shareholder? Assuming there is
    > to be a final outcome of the Proposal 1 Proxy vote If there is an
    > outcome on Proposal 1 at the previously "adjourned" May 29th reconvened
    > shareholder meeting, what would the best possible outcome for the
    > average investor be?
    > I realize you continue to believe BIF is a long and I continue to
    > believe your "house money" thesis holds merit. While I agree that
    > restoration of the distribution policy would have positive effects
    > on market returns, I believe an ethical Board of Directors not subjected
    > to enormous Conflicts of Interest would do much more for all shareholders.
    > Disclosure: I too am long BIF, as many readers already know.
    May 26 08:36 AM | 1 Like Like |Link to Comment
  • Weekly CEF Review: Highs and Lows [View article]

    To make a statement of opinion is your right under the First Amendment of the United States Constitution. However, as Hubert H. Humphrey once said, “The right to be heard does not automatically include the right to be taken seriously.”

    To make a dismissive comment, as you have, without providing as basis for your investment position is of little value. I, and I’m sure others, would encourage you to substantiate your case against BIF. You may have strong reasoning from which we could all benefit. However, so far you haven’t provided any; you’ve just wasted electrons.

    Joe Eqcome

    On May 24 11:19 AM mavericks wrote:

    > Long BIF, huh? Your credibility with CEF's just took a hit.
    May 26 08:09 AM | 1 Like Like |Link to Comment
  • Four Tax Free Income Stocks [View article]

    While there are still good reasons to own CEF muni funds (higher proposed tax rates and still historically attractive spreads between muni and government yields) this sector has already been one of the best performing CEF sectors YTD. That's not to imply they don't have further to go.

    Of the 237 muni bond funds in my data base, Muni CEFs’ share prices are up 25%, thus far exceeding the change in respective NAVs by as much as 10%. (So, investors seem to be favorable disposed to this sector.) The average unweighted distribution yield for both national and state muni CEF sectors is 6.2%. They’re trading at an average discount of 6.7% with an average expense ratio of 1.4%.

    Regarding your specific observations, I think VPV is probably the most attractive. It’s selling at a reasonable yield 6.8% and at an 11.1% discount with an average expense ratio. Both MAV and VCV are selling at or above par.

    VMV is the one you mentioned on which I would need to do some further homework. It’s very small ($47 million in Assets), it’s leveraged with ARPS at 42%, and its expense ratio is 100 basis points above the average.

    One of my favorites in this sector, that I’d be interested in your thoughts, is Nuveen Insured Premium Income Municipal Fund 2 NPX. Its portfolio is 44.3% “AAA” rated and 42.2% “AA” rated. It yield is 6.2%, selling at a 9.1% discount with an expense ratio of 1.28%. While it employs leverage, it has no outstanding ARPS.

    It’s just food for thought.

    Joe Eqcome (Long NPX)
    May 19 12:48 PM | 1 Like Like |Link to Comment
  • CEFs Reverse Course: Risk Avoidance Tops the Week [View article]

    As it relates to owning Berkshire through BIF--which represents 30% of the equity holdings, even if you valued the other 70% of its portfolio at par, you would have a 3.3 year breakeven at a 2% annual management fee before the current discount was consumed by the cumulative fee. (22% discount/((2% fee/30% Berkshire portfolio holdings)). Since Warren Buffett is a full professor in the investment business, I'd be willing to give him the courtesy of waiting at least 12 months prior to bailing.

    Joe Eqcome

    On May 18 12:50 PM bsharvy wrote:

    > A CEF isn't legally required to make distributions; if it is willing
    > to pay taxes, it can keep and reinvest the income.
    > The problem with BIF and BTF is that the fees are high. You are paying
    > over 2% a year for the ability to own Berkshire in small amounts.
    May 18 03:00 PM | Likes Like |Link to Comment
  • CEFs Reverse Course: Risk Avoidance Tops the Week [View article]

    Yes, you're technically correct, but I believe there is a limited number of circumstances where it would be justified. No one buys a conduit like a CEF so its management can retain earnings minus taxes to be reinvested. There are operating companies for that purpose which have greater flexibility of operation.

    Joe Eqcome

    On May 18 12:50 PM bsharvy wrote:

    > A CEF isn't legally required to make distributions; if it is willing
    > to pay taxes, it can keep and reinvest the income.
    > The problem with BIF and BTF is that the fees are high. You are paying
    > over 2% a year for the ability to own Berkshire in small amounts.
    May 18 01:17 PM | 3 Likes Like |Link to Comment
  • CEFs Reverse Course: Risk Avoidance Tops the Week [View article]
    User 415504

    There are several reasons why a CEF, which is legally required to distribute annually its earnings and realized capital gains, would not:

    1. It has no earnings and profits (E&P);
    2. It utilizes its loss carry forwards to off-set earnings and profits;
    3. It is precluded from distribution due to a leverage ratio that exceeds regulatory requirements.

    A rising stock market has several of the elements that would enable BIF to reinstate its distribution.

    In the last 5 fiscal years, BIF has generated investment income. In FY ’08 it did recognized capital losses. BIF’s accumulated net losses are minimal, so any earnings would be likely to be subject to distribution. (While I’m not an accountant and recognize I’m on “thin ice” here, in theory, management could continue to absorb earnings by selectively recognizing losses and therefore postpone distributions.)

    To the extent that distributions are a function of regulatory restrictions, rising stock markets and alternative financing of ARPS would mitigate that hurtle.

    Lastly, there are those that suspect that the distribution reduction was a ruse to allow the insiders to accumulate their positions at vastly reduced share prices. And that management of BIF would reinstate the dividend to enhance the value of their shareholdings as well as generate incremental return on investment.

    While I can not provide a smoking gun with regards to specific legal requirement for such distributions by calendar year end, I believe there’s enough circumstantial evidence for its reinstatement. Loosely translated, I’m speculating on a distribution reinstatement.

    Joe Eqcome
    May 18 09:48 AM | 2 Likes Like |Link to Comment
  • Are ETFs and CEFs Good for Dividend Investing? [View article]
    starvin sargent

    Thanks for your comments.

    My sector allocation is the product of the industry model I developed and is based on adjusted historical performance of fund types during different phases of the economic cycle. In late/early economic phases, the fixed income does well as typically interest rates decline. This is usually followed by a rotation through the equity fund types. Of course each cycle is different. During the current cycle, credit issues became a impediment to the fixed income fund types initial advance. This was particularly true of the preferred fund typds

    As it relates to the CEF analytical process, the investment algorithm I use is order of importance is: 1) Consistent high returns on NAV; 2) Abnormally large discounts for NAV (price, historical average, fund or sector type); 3) fund type or sector momentum (relative strength); 4) reasonable and sustainable distribution policy (investment income as a percent of distribution); 5) reasonable expense ratio; 6) insider ownership; 7) asset size and trading liquidity. That is the criteria for the ratings.

    I hope this is helpful.

    Joe Eqcome

    On May 09 09:21 AM starvin sargent wrote:

    > Hey Joe, Why BLV? Have you considered other CEF bond funds? Are their
    > any that meet your criteria? For me something like FOF where there
    > are so many funds bundled together to spread risk or HTR that uses
    > leverage on a bond portfolio seem to have more potential. Also TYG
    > that captures the divys from energy is good for that steady inflation
    > protected return. Although with all CEF's deleveraging HF's will
    > drive the share price very badly, just look at ETO or FOF for that!
    > Finally please write up your allocation to these instuments and sell
    > and buy rules, thansk for your work
    May 11 01:49 PM | Likes Like |Link to Comment
  • CEF Week in Review: Riskier Fund Types Rule [View article]

    If BIF's management is as cynical as you believe—and I believe there may be evidence they are—wouldn’t those that invested now prior to the reinstatement of the dividend be a net beneficiary of that future policy?

    My long term investment policy (12 months or more) criteria are: 1) Do I trust management? 2) Can management make me money? 3) Never reverse the order of "1" and "2".

    For short-term trade of 6 to 9 months—as I see this opportunity, I’ll occasionally make an exception to that policy if the story's compelling. The fact I’ll need to take a soapy, hot shower post investment notwithstanding

    Anyhow, it will be interesting to see how this plays out.

    Joe Eqcome

    On May 10 09:58 PM sskell wrote:

    > Isn't this pretty straightforward: they knew that if they eliminated
    > the distribution the share price would collapse, allowing them to
    > buy it a lot cheaper. They can reinstate the distribution anytime;
    > if I were as cyncial as these guys seem, I'd even raise it from its
    > previous level to suck in all the retail investors that love a big
    > distribution yield regardless of its source or sustainability.
    May 11 12:42 PM | 3 Likes Like |Link to Comment